Loading Market ...

The FA is looking into a dossier of allegations made by the Welsh club against their former manager and Iain Moody, who worked as Mackay's assistant at Cardiff before moving to Crystal Palace - but Mackay's representatives told Sky Sports News HQ their client is shocked by the allegations and ready to defend himself.

A subsequent LMA statement released late on Thursday said: "In the course of a search by the Club in early 2014 of 10,000 private text messages sent to and from another member of staff during Mr Mackay’s employment at Cardiff, in relation to other matters, it emerged that Malky had, it seems, sent a couple of one line texts that were, with the benefit of hindsight, very regrettable and disrespectful of other cultures.

"These were two text messages sent in private at a time Malky felt under great pressure and when he was letting off steam to a friend during some friendly text message banter.

"That said, Malky believes he could and should have conducted himself better on these two isolated occasions. The precise details need to remain private for the time being until any FA process is complete.

Cardiff have sent a dossier to the FA detailing allegations about Malky Mackay and Iain Moody's time at the club.

"The LMA does not condone in any way any potential breach of equal opportunities laws but would also point out that out of over 10,000 text messages and 70,000 documents produced over a long period of time it may not be a complete surprise that some inappropriate comments can sometimes be made by employees, like Malky, working under great pressure in highly charged situations. If Malky has caused any offence by these two isolated matters he would, however, wish to sincerely apologise.

"Malky finds it strange that these matters were only raised with the FA and in the media now, 8 months after his employment ended and the day before he was reported as being offered the opportunity to become manager of Crystal Palace FC.

"Malky is also very concerned about seriously inaccurate and misleading reports of his alleged involvement in these matters in the media. It has never been alleged that he wrote any homophobic or sexist messages and he has confirmed that he did not do so.

"Further, there are incorrect and damaging suggestions that he sent a whole host of offensive and unpleasant messages that are simply not true and which give a grossly distorted and unfair view of Malky’s involvement in this matter. Malky looks forward to matters being put straight in due course, following any investigation of this matter.

Sky sources understand Malky Mackay will not now be appointed as manager of Crystal Palace.

"Malky cannot of course comment on the nature of any conduct or communications alleged to have been made by others.

"Malky has said that he will be fully co-operating with any FA investigation and that he looks forward to putting the record straight thereafter."

Moody resigned from his role as sporting director of Palace on Thursday afternoon following the allegations which refer to work-related text messages sent between Mackay and Moody that bring the game into disrepute.

Football agent Phil Smith, thought to be the target of one of the texts, told Sky Sports News HQ he was "very surprised and a little let down" by the message which read: 'Go on, fat Phil. Nothing like a Jew that sees money slipping through his fingers'.

"Racism is completely unacceptable – and sport should lead by example as a multi-racial and multi-religious platform for those with aspirations to achieve – and this has clouded that a little," he said.

Mackay's name was dramatically pulled from the race to take over from Tony Pulis as Crystal Palace manager on Wednesday just before the existence of the dossier became public knowledge.

A statement from Palace read: "In light of the events of yesterday, sporting director Iain Moody has tendered his resignation and it has been accepted with immediate effect. There will be no further comment from the club on this matter."

Cardiff owner Vincent Tan sacked Mackay in December 2013, just six months after he had ended the club's 51-year wait for top-flight football.

Two months earlier Moody had been placed on gardening leave by Tan before being subsequently dismissed.

Mackay launched a £7.5m legal claim against Tan for compensation and wrongful dismissal after his sacking but dropped the claim in May and issued an apology to the Malaysian businessman.

With Mackay apparently out of the race and former Tottenham manager Tim Sherwood now ruling himself out it is not clear who will take over from Pulis at Selhurst Park.